Correlation Between Jiangsu Yanghe and Lingyuan Iron
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By analyzing existing cross correlation between Jiangsu Yanghe Brewery and Lingyuan Iron Steel, you can compare the effects of market volatilities on Jiangsu Yanghe and Lingyuan Iron and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Jiangsu Yanghe with a short position of Lingyuan Iron. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jiangsu Yanghe and Lingyuan Iron.
Diversification Opportunities for Jiangsu Yanghe and Lingyuan Iron
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Jiangsu and Lingyuan is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Jiangsu Yanghe Brewery and Lingyuan Iron Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lingyuan Iron Steel and Jiangsu Yanghe is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Jiangsu Yanghe Brewery are associated (or correlated) with Lingyuan Iron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lingyuan Iron Steel has no effect on the direction of Jiangsu Yanghe i.e., Jiangsu Yanghe and Lingyuan Iron go up and down completely randomly.
Pair Corralation between Jiangsu Yanghe and Lingyuan Iron
Assuming the 90 days trading horizon Jiangsu Yanghe is expected to generate 2.26 times less return on investment than Lingyuan Iron. But when comparing it to its historical volatility, Jiangsu Yanghe Brewery is 1.24 times less risky than Lingyuan Iron. It trades about 0.11 of its potential returns per unit of risk. Lingyuan Iron Steel is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 142.00 in Lingyuan Iron Steel on September 12, 2024 and sell it today you would earn a total of 65.00 from holding Lingyuan Iron Steel or generate 45.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.28% |
| Values | Daily Returns |
Jiangsu Yanghe Brewery vs. Lingyuan Iron Steel
Performance |
| Timeline |
| Jiangsu Yanghe Brewery |
| Lingyuan Iron Steel |
Jiangsu Yanghe and Lingyuan Iron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jiangsu Yanghe and Lingyuan Iron
The main advantage of trading using opposite Jiangsu Yanghe and Lingyuan Iron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jiangsu Yanghe position performs unexpectedly, Lingyuan Iron can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Lingyuan Iron will offset losses from the drop in Lingyuan Iron's long position.| Jiangsu Yanghe vs. China Life Insurance | Jiangsu Yanghe vs. Cinda Securities Co | Jiangsu Yanghe vs. Piotech Inc A | Jiangsu Yanghe vs. Dongxing Sec Co |
| Lingyuan Iron vs. Zijin Mining Group | Lingyuan Iron vs. Wanhua Chemical Group | Lingyuan Iron vs. Baoshan Iron Steel | Lingyuan Iron vs. Shandong Gold Mining |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Money Managers module to screen money managers from public funds and ETFs managed around the world.
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